Aston Martin swings to profit, boosted by DB11 flagship

LONDON - Aston Martin reported its first quarterly profit in a decade, as the British luxury automaker benefits from cost cuts and demand for its new DB11 sports car.

Pretax profit was 5.9 million pounds ($7.7 million) in the first three months after a 29.7 million-pound loss a year earlier, the company said in a statement on Wednesday. Revenue more than doubled to 188 million pounds thanks to strong demand for the DB11, which helped boost deliveries by 75 percent to 1,203 units in the quarter.

It was Aston Martin's first profit in that period since 2007, as an aggressive restructuring takes hold and a revamp of the DB flagship model propelled a doubling of deliveries.

Aston Martin anticipates that full-year sales will grow by more than 30 percent from 3,687 cars in 2016 as the company, which has gone bankrupt seven times in its 104-year history, sees the strongest signs yet of recovery.

Chief Financial Officer Mark Wilson said: "We are now in an area and an environment where we are generating demand in excess of supply."

In 2016, Aston's sales were at a low as the firm was still selling its range of older models ahead of the release of several new cars designed to boost volumes and its appeal. The automaker has made an annual loss in each of the last six years.

Aston Martin is owned mainly by Kuwaiti and Italian investors. It has said for years that its future could lie in a market flotation, but a lack of sufficient investment and a dearth of new models have thwarted its development since it was sold by Ford in 2007.

With the turnaround underway, plus a debt refinancing that has cut annual interest payments by more than 10 million pounds, there has been media speculation about whether the company's shareholders are looking at plans for an initial public offering next year.

"As far as I'm aware at the moment those discussions are not happening," Wilson said. "At some point those private equity businesses will want to realize value but the timing and manner of them doing that is entirely within their gift," he said.

EV and crossover

A key part of the firm's expansion includes building its first electric car, a version of its Rapide S model, which will help it to meet more stringent emissions criteria and widen its reach to new customers.

The company signed an agreement last year with Chinese consumer electronics group LeEco to jointly develop the electric version of its Rapide S vehicle. But the Chinese conglomerate has since announced job cuts and reduced its global operations in response to a cash shortage. Asked about the partnership, Wilson said: "We are in dialogue with them, we're working with them. They have undertaken their funding commitments so far so we will keep them at their word. They have absolutely contributed money into the partnership."

CEO Andy Palmer, who took over three years ago with a mission to widen the brand's appeal, plans to release the family-friendly DBX crossover in 2020 and start production of the electric Rapide next year.

The company aims to introduce a new or refreshed model every nine months. Upcoming models include the special edition Vantage and Vanquish. Aston Martin has also been lending its marque and aesthetics to makers of yachts, condominiums and baby strollers.

Aston Martin's opulent sports cars were popularized by James Bond films. The automaker has been cutting jobs and and expanding its range to reverse years of losses. In a bid to follow a trail blazed by rival Ferrari, the company may consider an IPO on the London Stock Exchange as early as next year, people familiar with the matter said last week.

The company forecast full-year earnings before interest, taxes, depreciation and amortization of as much as 170 million pounds on Wednesday, compared with previous guidance of as much as 165 million pounds. Profit on that basis jumped sevenfold in the first quarter to 43 million pounds, the company said.

It is "possible" the company could meet a target of posting a net profit at the end of this year a year earlier than planned, Wilson said.